Bright
futuresWith
Craig Donohue '95 at its helm, the Chicago Mercantile Exchange
forecasts continued innovation in its structure and technology

By
Deborah Leigh Wood

Craig
Donohue '95, CEO of the Chicago Mercantile Exchange, says
his Kellogg School classmates viewed him as someone who “couldn’t
tune out the office, and was mentally at work 23 hours a day.”

“They
probably wondered how enriched I was getting, but I soaked
up a lot and learned a tremendous amount,” Donohue says
in something of an understatement, given his career. Since
he arrived at the CME as a staff attorney in 1989, Donohue
has been on a fast track: vice president of market regulation
in 1997, senior vice president and general counsel in 2000,
managing director of business development in 2001 and chief
administrative officer in 2002 until assuming his current
title. He credits Kellogg with preparing him for heading what
is now, thanks in part to his leadership, the largest futures
exchange in the United States and the first publicly traded
financial exchange in the United States.

“My
job is both exhilarating and taxing,” he says. “I
probably could never work anywhere else. We have extraordinary
people and concepts, and great intellectual exploration. The
environment is ideal for cultivating ideas, creativity and
innovation.”

Donohue
is credited with employing all three in helping facilitate
headline-making changes. With cutting-edge technology now
in place, the CME offers what he terms a “vastly different
approach” of trading futures and options-on-futures
electronically on the exchange’s CME Globex trading
platform. Donohue says it lowers costs for market users and
has added value for the CME. In the first quarter of this
year, 52 percent of trades at the CME were transacted electronically;
in the third quarter that figure rose to 62 percent.

As the
CME continues to expand the distribution of its products electronically,
it is seeing the results in terms of increased volume and
liquidity. Donohue notes that “the growth of electronic
trading of CME Eurodollar futures is one of the futures industry’s
success stories in 2004. We have progressed from trading 100,000
contracts a day in January to one million a day in September.”
The CME recently announced that the CME Globex system traded
its billionth futures and options-on-futures contract since
its launch in 1992.

Perhaps
Donohue’s most significant achievement is helping to
consolidate the Chicago Board of Trade’s transaction
processing operations into those at the CME. “This is
an historic achievement,” he says. “The CME now
has the largest clearing organization in the world for derivatives
instruments, and this is providing tremendous value for our
customers and shareholders.”

Donohue
says one of his responsibilities as CEO is to facilitate creativity
and innovation in all facets of the organization and to create
a culture where others feel comfortable expressing new ideas.

“It’s
important to emphasize constant and incremental improvement,”
he says. Doing so sets the organizational tone of always striving
to build on achievements and never being satisfied with the
status quo.

As a result,
he typically works 12-hour days with responsibilities that
include talking to regulatory officials and civic and charitable
organizations, and focusing on shareholders, investors and
the public. International travel frequently keeps him away
from his home in the northern Illinois suburbs, where he lives
with his wife Elsa '92 and their three children, ages 5, 10
and 14.

Donohue
says he spends whatever spare time he has with his family,
putting aside favorite activities such as tennis and golf.
But the rest of the time, he is unapologetically tuned in
to the office, in his mission to “radically transform
one of America’s fastest-growing organizations into
a global, diversified financial services company.”